Dentsu Forecasts ‘Strong Recovery’ For Radio In Next 3 Years.
“Strong recovery for an evolving channel” – that’s the prognosis for radio, on a global level, from Dentsu. “Despite the pandemic, radio recorded higher listenership and hours with ad spending declining less than other linear media in 2020,” the ad agency giant says in its latest forecast. Worldwide radio revenues were down 9.5% in 2020, compared to -14.8% for all linear media. “While it is undoubtedly a commuter medium, more time at home also meant more time to listen, and radio is a very efficient source of news at times of change,” Dentsu says in its latest Global Ad Spend Forecast report.
In what may be a harbinger of things to come in the U.S, worldwide radio ad spend recovered to pre-pandemic levels in 2021, reaching $35.4 billion (USD), up 10.6% compared to 2020. Before that, billings fell for four consecutive quarters – from Q2 2020 to Q1 2021, Dentsu says, based on data from the top 13 global markets. The turnaround came in second quarter 2021, when the industry returned to double-digit growth. That continued into the second half of last year “with some sales houses reporting their best months in history,” per the report.
With the return of daily commutes and a “strong evolution to digital” increasing listening and advertising opportunities, Dentsu predicts a further recovery in ad revenues.
The report portrays radio as a medium with clear and distinctive attributes and advantages. “It is a very low-cost way to provide companionship and is singularly able to provide a soundtrack to myriad other activities including exercise and cooking, from the first thing in the morning to the last thing at night,” it says. “Increased mobility due to relaxed lockdown restrictions will bring more listening, as people return to their cars, particularly in the less digital markets.”
Dentsu also expects audio to benefit from the move to digital. With the ability to listen via mobile phones, smart speakers and digital TVs, listeners can access content at more times of the day. But the growth of on-demand audio via podcasts and music streaming services represents “both an opportunity and a threat,” it says. “The opportunity is to make content live for longer outside the time of broadcast, but the threat is that most of this content is independently produced and accessed through podcast players from technology companies like Apple and Spotify.” What’s more, music streaming services can use their global reach, scale, and algorithms to churn out playlists automatically.
Still, Dentsu says all these innovations “are building a listening habit for hundreds of millions who may also develop a love for radio.”
Its forecast calls for radio “to make a strong recovery in the next three years” with ad spend growth continuing in 2022 at 2.0% to reach $36.1 billion.
Second Consecutive Year Of Growth
Across all media, Dentsu’s Global Ad Spend Forecast anticipates 9.2% growth globally in 2022. The twice-yearly report, which combines data from over 50 markets globally, forecasts $745 billion (USD) will be spent globally on advertising this year.
That would mark a second consecutive year of growth, following the 7.1% market dip in 2020. “This year is projected to build on a stronger than expected recovery in 2021 which itself saw a record-high 17.0% growth, totaling $682.5 billion in worldwide ad spend,” Dentsu says.
Notably, that’s a rebound nearly three times faster than after the Great Recession of 2008.
Digital is expected to grow 14.8% this year, linear TV is on track to be up 3.8%, newspapers down 4.2%, out of home up 12.8% and radio up 2%. In the U.S., Dentsu says the ad market was 12% above 2019 in 2021, and it will be up another 14% in 2022, despite supply chain challenges in auto and other ad categories.
On a global basis, growth categories in 2022 will include the beleaguered travel sector, which is forecast to see an 10.3% rise. Automotive ad spend will grow 7.6% in 2022. “With pent up demand and a trend towards personal vehicles in how people want to travel post pandemic, there is confidence in the recovery of the Automotive sector,” the report says.
“The bounce back from the early pandemic impact continues to be strong, especially in digital,” said Peter Huijboom, Dentsu International’s Global CEO of Media And Global Clients. “As we spend more time-consuming digital media, brands have the opportunity to tap into the increased flexibility in which consumers engage through multiple touchpoints. Businesses who truly understand these developed human behaviors have the best opportunity to build lasting relationships with them.”